# How much do you pay for a financial advisor **URL:** \ **Category:** In My Humble Opinion\ **Created:** [October 2, 2008, 12:30am UTC](https://boards.straightdope.com/t/how-much-do-you-pay-for-a-financial-advisor/466107 "2008-10-02T00:30:50Z")\ **Posts on this page:** 18\ **Page:** 1
**Author:** ![Patty\_O\_Furniture](https://avatars.discourse-cdn.com/v4/letter/p/96bed5/32.png) [@Patty\_O\_Furniture](https://boards.straightdope.com/u/Patty_O_Furniture)\ **Post date:** [October 2, 2008, 12:30am UTC](https://boards.straightdope.com/t/how-much-do-you-pay-for-a-financial-advisor/466107/1 "2008-10-02T00:30:50Z")
And what does s/he actually do for you? I think I’m paying way too much, considering how very low maintenance\* I believe my portfolio is. \*Modest net worth under $500K, very uncomplicated financial situation, at 44 years old I’m still in the early-mid stages of retirement planning, and I do my own taxes. My only reason I can come up with for keeping him is that I hate dealing with finances. It constipates me. It takes me a whole bottle of castor oil to get my taxes done (but I do it anyway). ---
**Author:** ![Stainz](https://avatars.discourse-cdn.com/v4/letter/s/ecd19e/32.png) [@Stainz](https://boards.straightdope.com/u/Stainz)\ **Post date:** [October 2, 2008, 3:18am UTC](https://boards.straightdope.com/t/how-much-do-you-pay-for-a-financial-advisor/466107/2 "2008-10-02T03:18:08Z")
We pay nothing for ours, but he gets some kind of commission from our investments and insurance. I have heard it is much better to go to someone who charges a flat fee, because they are more likely to be impartial. But for us, this person came highly recommended, and if we waited until we saved up enough money to pay a flat fee, we probably wouldn’t have ever seen anyone at all. At least he has gotten us on the road to short and long-term savings, and we have purchased life insurance from him (well, his company) as well. But trust me, dude is NOT getting rich off us. 🙂 ---
**Author:** ![dalej42](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@dalej42](https://boards.straightdope.com/u/dalej42)\ **Post date:** [October 2, 2008, 3:26am UTC](https://boards.straightdope.com/t/how-much-do-you-pay-for-a-financial-advisor/466107/3 "2008-10-02T03:26:08Z")
Need more details. Is it a wrap account? Are they a certified financial planner? ---
**Author:** ![Patty\_O\_Furniture](https://avatars.discourse-cdn.com/v4/letter/p/96bed5/32.png) [@Patty\_O\_Furniture](https://boards.straightdope.com/u/Patty_O_Furniture)\ **Post date:** [October 2, 2008, 11:15pm UTC](https://boards.straightdope.com/t/how-much-do-you-pay-for-a-financial-advisor/466107/4 "2008-10-02T23:15:20Z")
A wrap… account? It’s just my retirement funds, an IRA and cash reserve accounts with Ameriprise. Twice a year we meet and he tells me that I need to have a will and he shows me charts and graphs that are supposed to indicate what my retirement account is doing. In between our biannual meetings, I’m not really sure what he does. Maybe he takes the money out for walks, or rolls around in it a la Scrooge McDuck. Earlier this year he did suggest that I move some of the money over to less risky investment vehicles - this was based on the mortgage slump (at that time it was only a slump). Also he suggested I bump my overall investment strategy down a few notches from moderately aggressive to something less, um… aggressive. > [@](#): > > Are they a certified financial planner? Here’s what’s in his e-mail signature: [ul] [li]CRPC ®[/li][li]Advanced Financial Advisor[/li][li]Chartered Retirement Planning Counselor SM[/li][/ul] ---
**Author:** ![scout1222](https://avatars.discourse-cdn.com/v4/letter/s/34f0e0/32.png) [@scout1222](https://boards.straightdope.com/u/scout1222)\ **Post date:** [October 2, 2008, 11:19pm UTC](https://boards.straightdope.com/t/how-much-do-you-pay-for-a-financial-advisor/466107/5 "2008-10-02T23:19:29Z")
I can’t remember the exact amount, but it’s somewhere in the neighborhood of $1,200-$1,400. He handles all of our savings (short-term in money market accounts, mid-term in mutual funds, and long-term in IRAs) and our life insurance. We meet with him at least twice a year to go through big picture stuff (what are your goals, how much will you need to meet them, etc.) and sometimes a few additional times to fill out paperwork for special things or new investments. ---
**Author:** ![PunditLisa](https://avatars.discourse-cdn.com/v4/letter/p/4af34b/32.png) [@PunditLisa](https://boards.straightdope.com/u/PunditLisa)\ **Post date:** [October 2, 2008, 11:47pm UTC](https://boards.straightdope.com/t/how-much-do-you-pay-for-a-financial-advisor/466107/6 "2008-10-02T23:47:54Z")
I still have to pay his blood-sucking company their cut of the commission but I get him for free. He’s my husband. ---
**Author:** ![dalej42](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@dalej42](https://boards.straightdope.com/u/dalej42)\ **Post date:** [October 3, 2008, 12:03am UTC](https://boards.straightdope.com/t/how-much-do-you-pay-for-a-financial-advisor/466107/7 "2008-10-03T00:03:29Z")
[Wrap account](http://www.investopedia.com/terms/w/wrapaccount.asp) These fees seem very high. ---
**Author:** ![glee](https://avatars.discourse-cdn.com/v4/letter/g/b5a626/32.png) [@glee](https://boards.straightdope.com/u/glee)\ **Post date:** [October 3, 2008, 12:10am UTC](https://boards.straightdope.com/t/how-much-do-you-pay-for-a-financial-advisor/466107/8 "2008-10-03T00:10:54Z")
Here in the UK, I got financial advice free from my bank. The adviser explained that he would be paid commision by the bank, but he would only recommend the bank’s services if they were as good as the alternatives. I’d just inherited from my parents, so his advice was: - pay off the mortgage early - buy into a fund (I had to specify income versus growth and degree of risk preferences) - calculate my outgoings v expected income, which led to - take my pensions early 🙂 - retire early 😃 Two years later my fund has dropped in value (no doubt it will recover), but still pays a decent income. Because of the amount I put in, I have an personal fund adviser. 🆒 I work 10 hours a week (purely because it’s enjoyable teaching my subjects) and can afford to eat out, update my computer system and have a couple of foreign holidays each year. Good luck to you. ---
**Author:** ![control-z](https://avatars.discourse-cdn.com/v4/letter/c/eada6e/32.png) [@control-z](https://boards.straightdope.com/u/control-z)\ **Post date:** [October 3, 2008, 3:08pm UTC](https://boards.straightdope.com/t/how-much-do-you-pay-for-a-financial-advisor/466107/9 "2008-10-03T15:08:32Z")
A friend of mine found an investment advisor that gets 1% of profits. That means if there are no profits, he gets nothing. The more profits there are the more my friend and the advisor gets. Other than that there are no fees or buying/selling fees. ---
**Author:** ![dgrdfd](https://avatars.discourse-cdn.com/v4/letter/d/eb8c5e/32.png) [@dgrdfd](https://boards.straightdope.com/u/dgrdfd)\ **Post date:** [October 3, 2008, 3:30pm UTC](https://boards.straightdope.com/t/how-much-do-you-pay-for-a-financial-advisor/466107/10 "2008-10-03T15:30:08Z")
I don’t pay anything for a financial advisor. My situation isn’t that tough and I think most everyone can do everything on their own by investing under $100 in some good books: Bogleheads Guide to Investing All About Asset Allocation A Random Walk Down Wallstreet The Four Pillars of Investing Most people have no idea how much they are paying (front and or back end loads, high commissions, high annual fees that over decades can cut YOUR nest egg by 25% or more, etc). And simple index funds will outperform most actively managed funds long term. Here is a terrific resource: [http://www.bogleheads.org/forum/index.php](http://www.bogleheads.org/forum/index.php) ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [October 3, 2008, 3:47pm UTC](https://boards.straightdope.com/t/how-much-do-you-pay-for-a-financial-advisor/466107/11 "2008-10-03T15:47:21Z")
I am not an expert on financial advisors or finance. I do have Series 7 and Series 66 (lapsed) and Florida Life, Health and Variable Annuity licenses. I was hired by Ameriprise several years ago. It’s very much a _Boiler Room_-type atmosphere. I don’t think they are actually doing anything fraudulent, but there is definitely a much greater emphasis on selling their products than on providing service. Also, they’re one of the only broker-dealers who hires financial advisors with no experience. IOW, your advisor probably has very little experience. ---
**Author:** ![dalej42](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@dalej42](https://boards.straightdope.com/u/dalej42)\ **Post date:** [October 3, 2008, 4:07pm UTC](https://boards.straightdope.com/t/how-much-do-you-pay-for-a-financial-advisor/466107/12 "2008-10-03T16:07:35Z")
[Here](http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/p085698) is a website that will show you the qualifications of any broker. It will also show any complaints that have been filed. For example, here is part of my report on the web site: **This broker has passed:** 2 Principal/Supervisory Exams 1 General Industry/Product Exam 1 State Securities Law Exam **Disclosure of Customer Disputes, Disciplinary, and Regulatory Events** This section includes details regarding disclosure events reported by or about this broker to CRD as part of the securities industry registration and licensing process. Examples of such disclosure events include formal investigations and disciplinary actions initiated by regulators, customer disputes, certain criminal charges and/or convictions, as well as financial disclosures, such as bankruptcies and unpaid judgments or liens. Are there events disclosed about this broker? **No** ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [October 3, 2008, 4:29pm UTC](https://boards.straightdope.com/t/how-much-do-you-pay-for-a-financial-advisor/466107/13 "2008-10-03T16:29:59Z")
> [@control-z](#): > > A friend of mine found an investment advisor that gets 1% of profits. That means if there are no profits, he gets nothing. The more profits there are the more my friend and the advisor gets. I’d be sold if he also paid 1% of the losses. ---
**Author:** ![crazyjoe](https://avatars.discourse-cdn.com/v4/letter/c/f14d63/32.png) [@crazyjoe](https://boards.straightdope.com/u/crazyjoe)\ **Post date:** [October 3, 2008, 7:09pm UTC](https://boards.straightdope.com/t/how-much-do-you-pay-for-a-financial-advisor/466107/14 "2008-10-03T19:09:40Z")
> [@friedo](#): > > I’d be sold if he also paid 1% of the losses. I was going to ask if they were profits after taxes, because you can structure your investments to make another 1 - 2 % easily, but lose out becaue of tax consequences. ---
**Author:** ![dalej42](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@dalej42](https://boards.straightdope.com/u/dalej42)\ **Post date:** [October 3, 2008, 10:49pm UTC](https://boards.straightdope.com/t/how-much-do-you-pay-for-a-financial-advisor/466107/15 "2008-10-03T22:49:41Z")
> [@control-z](#): > > A friend of mine found an investment advisor that gets 1% of profits. That means if there are no profits, he gets nothing. The more profits there are the more my friend and the advisor gets. Other than that there are no fees or buying/selling fees. ??? I’m going to have to look up some cites when I get back to work, but I’m not sure that is allowed. ---
**Author:** ![control-z](https://avatars.discourse-cdn.com/v4/letter/c/eada6e/32.png) [@control-z](https://boards.straightdope.com/u/control-z)\ **Post date:** [October 4, 2008, 5:36pm UTC](https://boards.straightdope.com/t/how-much-do-you-pay-for-a-financial-advisor/466107/16 "2008-10-04T17:36:23Z")
> [@dalej42](#): > > ??? I’m going to have to look up some cites when I get back to work, but I’m not sure that is allowed. I could be misstating it or leaving something out, it’s second-hand information. But what wouldn’t be allowed about the 1% concept? ---
**Author:** ![fruitbat](https://avatars.discourse-cdn.com/v4/letter/f/58f4c7/32.png) [@fruitbat](https://boards.straightdope.com/u/fruitbat)\ **Post date:** [October 4, 2008, 5:50pm UTC](https://boards.straightdope.com/t/how-much-do-you-pay-for-a-financial-advisor/466107/17 "2008-10-04T17:50:23Z")
> [@dgrdfd](#): > > I don’t pay anything for a financial advisor. My situation isn’t that tough and I think most everyone can do everything on their own by investing under $100 in some good books: > > Bogleheads Guide to Investing > All About Asset Allocation > A Random Walk Down Wallstreet > The Four Pillars of Investing > Most people have no idea how much they are paying (front and or back end loads, high commissions, high annual fees that over decades can cut YOUR nest egg by 25% or more, etc). And simple index funds will outperform most actively managed funds long term. > > Here is a terrific resource: > [http://www.bogleheads.org/forum/index.php](http://www.bogleheads.org/forum/index.php) This is excellent advice. Thank you. Most people would achieve better performance than their advisor delivers by going to Vanguard, following some simple steps, and implementing an excellent, simple. low cost plan. ---
**Author:** ![dalej42](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@dalej42](https://boards.straightdope.com/u/dalej42)\ **Post date:** [October 4, 2008, 8:21pm UTC](https://boards.straightdope.com/t/how-much-do-you-pay-for-a-financial-advisor/466107/18 "2008-10-04T20:21:34Z")
> [@control-z](#): > > I could be misstating it or leaving something out, it’s second-hand information. But what wouldn’t be allowed about the 1% concept? I \*\*believe \*\*that you can only charge a fee relative to the size of the account or per trade. I don’t believe charging a fee based on the profits that are generated in an account is allowed. This could cause the representative to suggest overly speculative investments, which could generate short term profit and the representative would also profit. If those investments then plummeted, the representative might not give the account the proper attention now that it isn’t profitable. I’ll have to look up some of these rules again. I’m a principal at a discount firm, so I don’t deal with different compensation plans such as these very often.